CA ATTORNEY GENERAL BECERRA ANNOUNCES SETTLEMENT WITH GENERAL MOTORS OVER DEFECTIVE IGNITION SWITCH

October 20, 2017 (Sacramento) – California Attorney General Xavier Becerra has announced a $120 million multi-state settlement with General Motors Company (GM) over allegations that the company concealed safety issues related to defective ignition switches in GM vehicles. California will be receiving over $7 million and GM must cease making misrepresentations to consumers regarding unsafe vehicles.

The settlement, reached among the attorneys general of 49 states and the District of Columbia and GM, concludes a multistate investigation into the auto manufacturer’s failure to disclose in a timely manner known safety defects associated with unintended key-rotation and/or ignition-switch related issues in several models and model years of GM vehicles.

“What GM did is inexcusable – it took nearly a decade for the company to inform consumers that its ignition switches were defective,” said Attorney General Becerra. “We are holding GM accountable today for this blatant violation of the law, which threatened the lives of millions of Americans. All companies should be put on notice: the California Department of Justice has zero tolerance for those who put profits over people.”

In 2014, GM issued seven vehicle recalls in response to unintended key-rotation and/or ignition-switch related issues, which have affected over 9 million vehicles in the U.S. The recalls involved a defective ignition switch which, under certain conditions, could move out of the “Run” position to the “Accessory” or “Off” position. If this occurs, the driver experiences a loss of electrical systems, including power steering and power brakes. If a collision occurs while the ignition switch is in the “Accessory” or “Off” position, the vehicle’s safety airbags may also fail to deploy, increasing the risk of serious injury or death in certain types of crashes in which the airbag was otherwise designed to deploy.

The States alleged that certain employees of GM knew as early as 2004 that the ignition switch posed a safety defect because it could cause airbag non-deployment. However, GM personnel decided it wasn’t a safety concern and delayed making recalls. GM continued to market the reliability and safety of its motor vehicles which were equipped with this defective ignition switch.

The states alleged that these actions were unfair and deceptive and that the automaker’s actions violated state consumer protection laws, including California’s Unfair Competition Law (Bus. & Prof. Code, § 17200 et seq.) and False Advertising Law (Bus. & Prof. Code, § 17500 et seq.)

Under a stipulated judgment, which will be presented to the Los Angeles Superior Court for approval, GM shall:

Not represent that a motor vehicle is “safe” unless they have complied with the Federal Motor Vehicle Safety standards applicable to the motor vehicle at issue.

Not represent that certified pre-owned vehicles that GM advertises are safe, have been repaired for safety issues, or have been subject to rigorous inspection, unless such vehicles are not subject to any open recalls relating to safety or have been repaired pursuant to such a recall.

Instruct its dealers that all applicable recall repairs must be completed before any GM motor vehicle sold in the U.S. and included in a recall is eligible for certification and, if there is a recall on any certified pre-owned vehicle sold in the U.S., the required repair must be completed before the vehicle is delivered to a customer.

A copy of the consent judgment is attached to the electronic version of this release at oag.ca.gov.